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why you’ll be richer without kids

Raising a child can cost up to $250,000 – and that’s from a study done almost 20 years ago. That’s only the cost through high school – college is another problem entirely, unless you don’t plan on paying for your child’s education (and I don’t). Having a kid is expensive. Having a second is less expensive – hand-me-downs and shared costs can reduce the individual costs – but a larger family is going to cost a fortune. The simple fact is that you won’t become AS rich with kids.

I’ve seen the question of children play out a dozen different ways with friends and in my own life. My parents had kids (my brother and me) when they were barely out of their teenage years. I have friends who waited until they were almost 40 to have kids. One couple fervently and frequently insisted they would never have kids – and show no signs of changing their minds. In each case, the decision to have a child (or children) was deeply personal, and made for a number of reasons – but seldom considering the cost. The simple fact is that you’ll be better off financially without kids. Kids are expensive.

It’s a potentially sensitive topic … and most people don’t want to have that conversation. “Kids bring so much joy into your life!” “Kids are their own reward!” I’m biased – the cliches are all true. My son’s a supernova of energy, creative and amazingly verbal. My daughter’s charming and almost impossibly cheerful. They are joys. But to be realistic, I have to admit that because of them I will not be as wealthy as I could have been. I regret nothing, but I also understand that I’m going to have to work harder accumulating wealth than I would have without children.

So how do we plan to compensate? If you have kids, how can you avoid spending more than you need to? It’s not the nature of my blog to talk about ways to save money on Cheerios by buying the store brand. But I do have a few “big ideas”:

I’m not paying for my kid’s PRIVATE college education. If Little Buddy wants to attend a private school, he’d better develop his tennis skills or become a world-class scholar. I’m not paying for Pumpkin to attend an Ivy. I’ll help, but if they can’t pay for a private college, they can go to a public university, just like Mama and Papa did. We did just fine.

We will readjust our lives around their education early on, though. In the city we live in (the New Jersey “suburbs” of New York) the public schools are awful. I am, however, firmly opposed to private schooling. We will either move to find a good public school district, or homeschool. I’m increasingly set on that idea.

I will strive to teach independence. This sounds stupid, but I have seen so many of my colleagues in corporate America talking about their mid-20 (or even mid-30) year old children living at home. I know I can talk big now, but I left home at 18 and my children will too. If we’re still living in the NYC area and they can’t afford a home, I’ll tell them to move to a cheaper locale. An unmarried 35-year-old living with their parents needs to experience life.

We will resist consumerism. My neighbors bought one of those big car-battery powered cars – with a working FM radio – for their daughters. Little Buddy loves it. I was tempted to get him one. He doesn’t need it. I have fallen victim again and again to the urge to buy toys. Sometimes it makes sense: I bought him a farm set that he plays with daily. Sometimes I fail: I have bought a half dozen balls (football, baseball, soccer) and he is utterly indifferent to all of them that don’t have Spiderman on them. But I see a sickness in most parents around me: the need to buy distractions. I struggle to remind myself that learning to pretend my wooden blocks were race cars taught me to IMAGINE things. My parents would have done me a disservice by buying me Hot Wheels. Learning how to live with less – at least as far as toys – is a gift, not a burden.

But none of these cost-saving ideas can compensate for the fact that a childless couple (or a single person) will simply be much better off than a couple with kids. I won’t recommend one choice or the other, because it’s such a personal choice. But don’t let anyone tell you otherwise: in the short term, having kids is no big deal. You can afford formula, diapers, baby clothes. But in the long run, having kids will change your career choices, affect your ability to save and limit your choices about almost everything. Make sure you’re comfortable with the long-term cost before you take the leap.

53 comments

This is something M and I discuss a lot. We want to travel and we want to enjoy our “youth,” and then we'll be ready to have kids. But you're right, even if people don't want to hear it: you will be financially better off without kids.

It costs between $5K and $10K annually to own a car (lookup Your Drivings Costs 2007), so to put the $250K per kid into perspective, owning a car over a 50 year driving career costs minimum the same ($5K X 50 years = 250K).

Of course, we are overpopulated with cars too 🙂 And the price of the kid might even include some car time in the later years!

I'm thinking that the most important expense is the opportunity cost – mostly because it's insidious.

I quite like your ideas for compensating. I reckon resisting consumerism is the hardest and most important as it's continuous. If you don't resist it'll work out very expensive.

Having an adult kid at home shouldn't cost the parents any money – they should be charging rent to cover at least food and extra bills. But, my siblings (some of whom live at home) reckon I'm hard-hearted.

Education is a difficult thing. I personally wouldn't phrase it that you won't pay for private education. Presumably, it doesn't matter which accredited school that they go to, you'll only pay for whatever Rutgers costs. Otherwise, some public schools (UCalifornia / UMichigan) are more expensive than many private schools if you're from out of state. Insisting a kid goes to public school when a private school is as affordable (say, via scholarships) is just reverse snobbery.

You spend all your money nonetheless. Kids get some of it if you have them, but xboxes or airlines get it if you don't. Life is simply expensive. And all these arguments about overpopulation I find fairly one-sided. They have the flavour of “I know I fit on the planet, but I really have doubts about those others …”

If someone did a study on people who made $1B+ they would find that it probably costs many many millions per year to be a billionaire. More than most people's annual salary just on clothes I would bet. Therefore, most people cannot afford to be billionaires and we would have more spare money if we were homeless bums. We could seize upon that opportunity cost that being a billionaire is be able to take our dream vacation.

In my opinion kids are super. I think I would have as many as possible but that might change as my kids get older 🙂 Right now they're awesome, but I do pay in terms of lifestyle. There are things I want to do but can't because there are not enough hours. The kids take up time that I would fill with something else if they weren't here.

Penelope Trunk has probably the stuff that's most thought-provoking (to me) to say on this subject, I find all of her viewpoints on the subject really interesting.

At the end of the day though, who the hell knows what's around the corner even with the best laid plans. Whether it be poor health or your job function disappearing or being left with siblings' children. My parents also had us very young and in the midst of a godawful decades-long Irish economic horror. They could never anticipated the celtic tiger was around the corner after we'd all grown up.

You're quite right that children will cost you a tonne of money, but that's why you need to work to ensure you get a decent return on your investment. While most parents will never receive back the money they put into their kids, if you focus on training your child to be either a pro athlete or pop star you stand to enjoy significant financial benefits. This may involve pulling the child out of formal education and focusing solely on these pursuits, but the return might just be worth the sacrifice…

Well, you can count me with your friends who will never have children. I made that decision at age 11 and I have never wavered. My primary motivation was a recognition in myself that I wasn't cut out for motherhood. Not everyone is; let's be honest. The secondary motivation was the recognition that the last thing this planet needs is another human being. Environmental issues have been very important to me from an early age. Living as I do in the “first world,” I know there are no practices that I could follow which would offset the environmental damage which would accrue from me having even a single child.

But yes, lately I've also recognized that my husband and I are saving a large bundle by not becoming parents. On the other hand, we look forward to the end of our lives and wonder who might take enough of an interest in us to care how our last years are spent. Even a fair bit of money won't cushion those who are sick and isolated from the grim realities of elder care in this country. People with kids have a decent chance that that's a foregone issue.

Kate, I assume you are fairly young. I agree with you that not everyone wants to be a mother or a father. How did you know it at age 11, though? Wow. And yes, the world is overpopulated, but it's overpopulated by dumb people. This world needs children by smart, intelligent, educated, good, honest people. And unfortunately, those intelligent, educated and good people don't want to have any children, or have one or two, instead of 15 ;o)

But, the article is really about finances and children.

And I am also curious to hear an opinion of an elderly couple (let's say in their 50 – 70s) who decided not to have children when they were young.

“And yes, the world is overpopulated, but it's overpopulated by dumb people. This world needs children by smart, intelligent, educated, good, honest people. And unfortunately, those intelligent, educated and good people don't want to have any children, or have one or two, instead of 15 ;o)”

I couldn't agree more, but our society isn't set up for those people (smart, educated, etc.) to have children. For instance, my sister is a special ed teacher and she knows of a fair number of families who have 4 or more children, and purposefully prevent these kids from learning, in order to have them qualify as special needs. This gets them more government money. The only way to fix this is through drastic measures that no one is willing to do.

Not related to this article directly: There's a movie “Idiocrasy” starring Luke Wilson that sums up what everybody knows is happening. The movie itself is done poorely, but the idea is good.

A short synopsis:

“…..natural selection is indifferent to intelligence, so that in a society in which intelligence is systematically debased, stupid people easily out-breed the intelligent, creating, over the course of five centuries, an irremediably dysfunctional society. Demographic superiority favours those least likely to advance society. Consequently, the children of the educated élites are drowned in a sea of sexually promiscuous, illiterate, alcoholic, proletarian peers…”

Well, I'm 38 and half; not really young in terms of a woman deciding whether or not to have kids. I don't have much time left to change my mind, and I don't think I will.

I really don't want to rehash the (over)population argument, because it's been done to death before. Still and all, I'll respond to what you said: “This world needs children by smart, intelligent, educated, good, honest people.” Unfortunately, parents don't get to decide how smart their kids are going to be before they're born. They *might* get some say over the rest of the descriptors, but there are psychopaths raised by decent folks too. My belief is that, “good” person or “bad” person, if that person lives in the first world, as I do, that person is almost guaranteed to be exacting an ultimately unsustainable load on our environment.

I care about the environment too, and the lengths I would have to go to in order to live a truly sustainable life would make me even more freakish than I already am. For starters, eating meat, driving or riding in a gasoline-run vehicle, and sending trash to the landfill would be off the table. Anyone volunteering to go there?

You'll notice I'm not arguing with your claim that the world is overpopulated by dumb people… ;o)

I am no where close to the point of my life of getting married or having kids, but good advice to look out for in the future. From a post grad's point of view, I have to disagree with you allowing your kids to come back home after 18. My parents raised my to be very independent, and I think compared to my friends I have always been more independent and able to be on my own and take care of myself. After college I took a job and moved back home for a year. It allowed me to save enough money to not have to worry about living pay check to pay check and put strain on myself or potentially having to ask parents to borrow money. From there I have moved to a new city and wouldn't have been able to without living at home for a year. The added costs of me being home were extremely minimal, and other than food costs I can't really think of anywhere else that could have made much impact. I think a lot of parents would like to help their children out in the beginning to save money, because in today's times things are more expensive. I'm curious to hear parents views on this or other people who were in my situation.

@moneymonk: Well, it's UP to – the study pointed out that location, lifestyle, income level, etc. all play heavily into that estimate. At the same time, I bet your mom spent a fair amount with 7 kids – maybe more than you'd think at first guess.

It's too late for me. We put three kids through private school. Not sure why you are opposed (except for maybe the cost) but there are benefits if you can afford it. (My adult sons thank us regularly.)

And yes, I feel “richer” for having kids. But they are not for everyone, as we read daily in the news.

@Mr. ToughMoneyLove: I guess I'm opposed to private school for the simple reason that you've already paid for public schools through your tax dollars. Private school is doubling up on your education payments. I live in a horrible – HORRIBLE – public school district so if I had to stay here I would pay for private school. I just don't see the point, unless you're committed to a certain methodology of education only offered in private schools (Montessori or Waldorf, for example) or a religious education. I'm also, in general, a fan of the democratic nature of public schools as opposed to parochial schools, but that's just my personal political/religious view.

It's not quite the same thing, since you're talking about a positive benefit (schooling) versus a negative one (prisons and taxes). A better example might be taking the free public interstate versus taking a toll road – a longer, slower drive versus a faster but more expensive one.

I agree with Plonkee – there are some very affordable private colleges, and some expensive public schools. It all depends on grants, scholarships and other forms of financial aid.

I was shocked when I applied to colleges and found out that a local private college was less expensive for me than state school. My parents made JUST enough money to be disqualified for aid at the state school. The more expensive private college had a higher income cap. They were also looking for more diversified students and had a larger pool of money for scholarships and grants – I had what they wanted (experience in my field), so they made school affordable.

Long story short: If you plan to pay for anything, set a dollar amount. You'll pay $5,000 per semester (for example) whether they go to Harvard or the state school, and it's up to them to come up with the difference. There are some great public universities out there, but they're not your only option.

For my own kids, we plan to save enough for 50% of four years at a state school. If they're smart, they'll make it work. To use your words, they can get a job in college and apply for scholarships, just like Mama and Papa did. We did just fine!

@Stacey: You're absolutely right that I shouldn't be so firm in the private/public school argument, but focus instead on the cost. An out-of-state public school might cost more than a private school, or the private school might have more scholarships available (as in your case). So I'll modify my thinking and agree with you – the key is really finding the lowest-cost, highest-quality education available.

I look forward to having kids in a couple of years. Being the eldest in my family, I love having younger people around asking for my help and opinions. It is an emotional decision.

As for saving money, you can't take it with you when you die. What is the point of accumulating all this wealth if you are going to die alone? People first, money second has always been my governing value. No matter how much money you have or how great your career is, you are going to be remembered by how many people cried at your funeral.

As Kate mentioned, having kids means that there will be at least one human being who will take an interest in my care when I am elderly.

The obvious answer is to find a way to get your child signed on to a Disney show.

Yeah, having kids is expensive and I think one has to consider the cost when thinking about having kids. But I don't think it should be the sole reason not to have kids. You're right, all of the cliches are true. Coming home from work is so great when the little guy is there to greet me. Nothing can replace that!

But there are costs – More kids = bigger house; food; clothes; travel; and so on.

@FFB: Oh, absolutely, there is no financial benefit to having my daughter light up like she's just won the lottery when I walk in the room in the morning, or my son beaming like the sun when I spin him around doing “helicopters.” Financial concerns didn't stop us from having kids. We love them and don't mind the costs – but we see other couples we know who think it won't affect their lives financially and I wonder if people really think it through beforehand. Like you said, nobody thinks when they are pregnant about the costs of a 4th plane ticket when you're flying to see Grandma. Nobody thinks about the cost of a car big enough for a five-person family, etc….

Honestly, I keep waiting for my kids (17 and 19) to get expensive. By following general rules of frugality (cloth diapers, public schools with lots of enrichment, etc) and saying no to activities that did not seem to us to provide good value (private tutoring, traveling soccer, and the like), we've been able to raise our kids (including college and frequent travel to Europe and Asia). We've also continued to save a hefty chunk of our TEACHER's salaries.

See my blog for talk on our frugality. We are just starting and will be posting on this very topic frequently.

The thought of the cost of children never so much as crossed my mind when I decided I didn't want them. (And I probably wasn't 11, but I can't say that I ever remember wanting them when I was a kid myself. I do remember having an argument with a deeply religious friend when I was in high-school: I told her I didn't want kids and she told me that was against God's will, something to that effect. So I do know I was young when I first voiced my lack of interest in having them.)

As I grew up, though, I never had the urge to have them. It wasn't that I was against it, just that I never was FOR it. I'm nearly 45 now and not only very happy with my decision (despite all that joy I'm missing), I agree that the financial savings has been significant. Significant enough to help in my quest to retire young (which I did early this year.)

So, Steve, I agree totally with your point, that it isn't really a financial decision for people, but it certainly has a financial impact one way or the other.

I think the $250k figure comes from the same crowd that “needs” one or two millions to retire despite the fact that lots of people retire just fine without millions on the bank account. Likewise, it is possible for people to spend less than a quarter million on raising a kid.

Second point. We have chosen not to have children. I guess one could explain the reasons either via cost-benefit or the law of comparative advantages. I'm simply better at not having having children compared to all the other stuff I want to do. Right right … my point was that having children also have tremendous time costs and hence large opportunity costs. (I hear they're worse than owning a TV ;-P )

@ERE: Well, again, the 250k figure is a high end figure, and I'm sure that it's probably heavily skewed towards northeasterners and people highly involved in the cello-lesson mentality. I am certain that my parents, for example, spent less than a quarter mil on my brother and myself combined, simply because their salaries, net of taxes and housing, etc. combined over 20 years probably didn't pass that level (although you could argue that taxes and housing might be considered part of that cost).

The time cost is another thing entirely, and gets more into a comparison of non-financial and non-quantifiable benefits: time versus the intangible emotional satisfaction from having children. For me, it's a life experience that I'd be sorry to have missed – but I didn't think that way 10 years ago, so I understand the mindset of not wanting kids. I guess it's like eating sushi. It's hard to know if you'd like it or not until you try it, although many people assume in advance that raw fish wouldn't be something they'd like, and decide not to try it at all. And I'm sure many people live happy lives without having tried sushi, finding satisfaction from eating other things instead…

Tortured analogy, sorry. Still think it's as accurate as I can get, though.

I've always liked kids and wanted some of my own. It didn't happen until a bit later in life – I think I was 37 when my son was born. Money wasn't a consideration since we have enough to raise a couple of kids fairly easily – especially with our generous relatives.

I agree with some of the other comments that the time (opportunity cost) is the big one. Get any travelling out of the way before you have kids!

I am not sure I see this conclusion play out in real life though. On the extreme end the 20 richest people in the world all had children. I know it is extreme but it would basically destroy the statistics that children = less wealth.

I will argue that the change that happens when maternal and paternal love springs from the deep changes your life forever. I know I am a living example, I know that I am probably happier and more fulfilled and with that becomes more motivated and driven. For me I know that is much wealthier since I got married and then had children. Just my take, I forget what the Millionaire Mind had to say on the issue.

@The Happy Rock: well, the title is of course a little bit inflammatory. At the same time, I'd still argue that the basic numerical concept is there: children take money to raise. With no children, you'd have more of that money – not to mention the intangibles of time, more opportunity to chase other lines of income, etc.

You do bring up a very good point, though, that I didn't really explore, which is the case of people who are inspired to greater heights of achievement in their careers or business or whatever to provide for their families. It could be that the drive to succeed is heightened by having children, and maybe that's the compensating factor.

And again, just to reemphasize that I'm not being a heartless dad, I love my kids like crazy – I don't look at them and see price tags on their heads, any more than I look at my parents and see a dollar sign for my inheritance on their foreheads!! 🙂

i'm pretty sure this comes up in stumbling towards happiness, but i think he draws the conclusion that kids don't make you as happy as you think. it's not quite that clear cut, more along the lines of expectation vs reality not being the same, and also that we have faulty memories and tend to paint rosier pictures of what happened than we do in the moment.

all that being said, you can cut down on some costs by adopting! which would also address some of those overpopulation issues. and speaking of, smart parents don't always have smart biological kids. it has more to do with the environment in which they are raised, than the random assignment of genetic matter.

and i'm sure i've said this before, but i disagree on the paying for college thing, though i really have no issues with the position of finding the best bang for the buck. that being said, who knows how i would have turned out if my parents had done that. 🙂

“My life has been enriched by my daughter far more than any currency ever could.” – I dont even have kids yet and I agree with this statement 100%. Making a lot of money just gives you money, it does not necessarily make you rich. I could care less about being wealthy as long as I have a nice life with good friends/family and I have my health. Everything else is extra, including being wealthy.

I agree. This is a very interesting discussion. My husband and I have talked about his coworkers who chose not to have kids and we are glad when people know they don't want to have kids. We have kids and love having them. People who don't want kids shouldn't have them – the worst is when someone who doesn't want kids and ends up having them and then doesn't take care of them. We may never become rich but you know what? Being rich is too overrated. You only need enough to live on, the idea is to know how much is enough and make plans accordingly. The value of the comments here is that we are all thinking about these issues and even though we don't all agree, we know the different sides to of these issues. Everyone has a different take and each is valid.

Being a parent can be extremely difficult but it is also a wonderful experience. It is the most important job in the world – bar none. You are responsible for this human being until he/she reaches adulthood and beyond. People talk about changing the world, well, you can do it right at home. You are this person's world. The relationship you have with this person is priceless. A rich family life surpasses any success in life.

Again, please don't miss the points – I have two, I love them dearly, yet they are expensive. I just mean that people need to be aware of the costs and find strategies to cope – without cheating their kids!

Seems to me that no matter what the reasons are that someone chooses not to have kids others should go ahead and be glad they chose not to have them (even if it's not for financial reasons as you mention above.)

That's not how it is in real life though. For the most part, whenever I told people I didn't want kids, they tried to tell me all the reasons I should have them. I would never think of trying to convince people that want kids not to have them! Whatever the reason they have for having them is none of my business, and I'm glad for them they are following their heart in that respect.

Also, I've never asked what reasons someone has for wanting them, but LOTS of people ask me to give reasons why I didn't. I don't actually think it boils down to “reasons” when people decide to have them or not–it's much more basic than that. Either they want them or not.

I could not have agreed more heartily with this post. I want kids in the future and we know that they will cost a bundle, but we have a plan in place which pretty much encompasses what you`ve written there.

I think people jump into a lot of things without really thinking about it and having kids is definitely one of them. It's not really my business, but when a couple has money issues AND relationship issues and then announces that they're having a baby, it does raise a few eyebrows. On the other hand, I congratulate new parents when I hear that they're doing very well and being smart with their money, especially when the pregnancy was unplanned.

But seriously, the kids have made a difference in our lives. I accept that we have to spend more when we have children. My wife and I sincerely believe that whenever we have children, a little door opens up there and a little more favours are granted to the parents.

Ugh… If I hear one more “the world is overpopulated” comment I am going to puke. Are you aware we pay farmers NOT to farm in order to keep prices UP? I swear people living in NYC or LA think the entire earth is just like them. I lived in San Diego for awhile.. Crowded? Yes. Try driving 15 minutes East… Whoa! As barren as Nebraska, or Iowa, or the Dakotas, or…..

Kids are expensive, I'm sure, but deciding not to have them because you think it will send our precious earth into a tailspin? HA! Don't believe the hype… Actually, do believe it.. I'd prefer you not breed.

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